Claim Spotlight: The $1.2 Million Miscommunication

Project Type: Mixed-use commercial development

Design Professionals Involved: Architectural firm, structural engineer

Claim Cost: $1.2 million

Root Cause: Communication breakdown between architect and structural engineer

Background

An architectural firm led the design of a multi-story commercial building. During the design development phase, the architect issued revised floor plans that included changes to column locations and load-bearing walls. The updated plans were sent to the structural engineer by email, without a formal transmittal or coordination meeting.

The structural engineer, unaware of the changes, continued developing structural drawings based on the original layout. The discrepancy was not discovered until construction was well underway, when the contractor flagged inconsistencies between the architectural and structural drawings.

Consequences

• Construction Halt: The project was paused for more than six weeks while the design team resolved the conflicts.
• Demolition and Rework: Portions of the structure had to be demolished and rebuilt to align with the revised architectural intent.
• Client Claim: The developer filed a claim against both the architect and structural engineer for professional negligence, citing delays, increased costs and loss of rental income.
• Insurance Impact: The claim resulted in a $1.2 million payout, covering legal fees, reconstruction costs and a settlement with the client.

Key Takeaways

• Informal Communication Is Risky: Relying solely on email without formal coordination or documentation can lead to costly misunderstandings.
• Coordination Is Critical: Design changes must be clearly communicated to all consultants, supported by updated drawings and coordination meetings.
• Documentation Protects: The absence of documented transmittals and meeting minutes weakened the defense and contributed to the severity of the claim.